Wednesday, February 24, 2016

Alabama Federal Court Orders TTAB to Vacate HOUNDSTOOTH MAFIA Precedential Decision

In a June 23, 2015 ruling [TTABlogged here] the TTAB refused to vacate its 2013 precedential decision that dismissed an opposition to registration of the mark HOUNDSTOOTH MAFIA, in the design form shown below, for "shirts, hats." A civil action for review of that 2013 decision, filed in the U.S. District Court for the Northern District of Alabama, had resulted in a settlement and entry of a consent judgment, in part ordering that the Board's decision be vacated. The Board declined to do so. On February 23, 2016, Judge R. David Proctor granted the University's motion to enforce the judgment, denied as untimely the USPTO's motion to intervene, and issued an Order (here) requiring the TTAB to vacate its decision within fourteen days. Board of Trustees of the University of Alabama v. Houndstooth Mafia Enterprises, LLC, Case No. Case No.: 7:13-CV-1736-RDP (N.D. Alabama February 23, 2016).

The court observed that it was acting like an appellate court vis-a-vis the TTAB. "If an Article III court is ... bound by an appellate court’s decision, it follows that an administrative body (like the TTAB) is similarly constrained by a district court’s decision made while that court is acting as an appellate court reviewing a decision of the TTAB."

Thus, the mandate rule requires the TTAB to follow, rather than reexamine (or worse, ignore), this court’s final judgment. *** When a lower court is subject to appellate review, it is not free to deviate from the appellate court's mandate.

The district court asserted that not only did the TTAB not have the authority to ignore the district court's final judgment, but its reason for doing so was faulty. The court found that the Board missapplied the Supreme Court's decision in U.S. Bancorp and "flatly mischaracterize[d]" the facts of that case. Unlike here, Bancorp did not involve a provision in which the parties agreed to vacate a lower court decision.

The question the Supreme Court actually faced in U.S. Bancorp was this: Is the mere settlement of a case on appeal (or certiorari review) grounds, in and of itself, enough for a reviewing court to vacate the civil judgment of a subordinate court? *** To be clear, that is not the question presented here. In this case, the parties expressly agreed, as part of their settlement, that the TTAB’s decision below would be vacated.

The court found this case like Major League Baseball Properties, Inc. v. Pacific Trading Cards, Inc., 150 F.3d 149 (2nd Cir. 1998), where on appeal the parties jointly requested that the Second Circuit vacate the district court’s order and opinion "so that they could settle their dispute." The court brushed aside the TTAB's attempt to distinguish the current situation from that in the Second Circuit case.

Just like Pacific Trading Cards in Major League Baseball Properties, Defendants were locked in a dispute that they could not afford to continue litigating and wished to settle. The dispute could end on a "commercial basis satisfactory to both." Major League Baseball Properties, 150 F.3d at 152. But vacatur of the decision appealed from was a non-negotiable necessary condition to that settlement. Id. Thus, Houndstooth Mafia faced a similar Hobson’s choice.

As for the USPTO's motion to intervene, the court pointed out that the TTAB issued its 2015 decision refusing to vacate, more than one year after the district court's judgment had been filed with the Board. "[I[t was not until September 17, 2015 (after a hearing on the motion to enforce took place), that the Director filed her motion to intervene in this long-since closed action."

The court found the Director's motion to intervene to be untimely, and that "any right to intervene in this long-closed action has been waived."

Read comments and post your comment here.

TTABlog comment: The judge's memorandum opinion is not kind to the TTAB or the USPTO. In any case, I guess if a party has enough money and the other side doesn't, the first party can undo whatever the TTAB has done. Is that trademark bullying?

Text Copyright John L. Welch 2016.


At 9:00 AM, Anonymous Anonymous said...

Note that at one point, on page 18, the court finds that one argument made by the USPTO "is not only incredible, but also made in bad faith."

At 9:36 AM, Anonymous Anonymous said...

Regardless of the merits, I agree with the Court, that the TTAB must do as the Court instructs it. Part of the political turmoil this country is going through is the people's frustration with rules and ruling made by administrators, not be elected representatives or the judiciary.

At 11:52 AM, Anonymous Miriam Richter, Ft. Lauderdale, FL said...

While I haven't read any of the cases, just the idea that non-judicial actors can agree to vacate a court order seems wrong. How much scrutiny did the court give the consent judgment? I would hope a tremendous amount. Somebody brought this case and now they are out of money - too bad so sad. We have all been there, why is this case any different?


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